CCalclabhub

Marketing

Average customer lifetime

The reciprocal of the monthly churn rate gives the expected number of months a customer stays. It feeds straight into customer lifetime value.

The Formula

Lifetime = 1 / c

The reciprocal of the monthly churn rate gives the expected number of months a customer stays. It feeds straight into customer lifetime value.

SymbolMeaning
cMonthly churn rate as a decimal
LAverage lifetime in months

What Each Symbol Means

cdecimal

Monthly churn rate as a decimal

Must be the same rate and the same period used elsewhere. 0.04 gives 25.0 months.

Lmonths

Average lifetime in months

1 / 0.04 = 25.0. Halving churn to 0.02 would double it to 50 months.

See It Worked With Real Numbers

A formula on its own does not tell you which number goes where. The how to calculate churn rate page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.

Where This Formula Appears

This equation is the working core of How To Calculate Churn Rate, filed under Business. Every number the guide produces comes from substituting into this one line.